What the U.S. Government Does Right in Promoting Innovation

John Holdren and Wan Gang at the U.S.-China Innovation Dialogue. Photo by Erin-Michael Gill

There are two unfortunate, and incorrect narratives around the United States government’s role in innovation: some say our government is increasingly neglecting its duty to “promote science and the useful arts” by not adequately investing in new science and technology development.

Or this even more pernicious narrative: the U.S. government is wasting taxpayer resources and doing too much to handhold innovation. These people say we are inappropriately directing government monies toward high-risk research that private companies should do instead, since they are better equipped to understand market needs and opportunities.

The reality is that the U.S. government is an important agent in facilitating and promoting innovation. Here’s why:

To begin with, investment in launching new technology carries significant business risk. Investors seek early validation before they deploy more capital, growing such businesses at potentially higher valuations. Today the U.S. government is serving as a positive force powering that kind of valuation growth by working closely with both industry and other nations to develop the kinds of innovation that could serve larger markets even more broadly. The resulting patent portfolios, technologies and new companies are all evidence of the importance of the unique types of problems our government is solving.

The U.S. Department of Health and Human Services has more in-force, U.S. patents (1,571) than pharmaceutical giants Merck (1,405) or AstraZeneca (1,434). The U.S. Army (with 1,166) has more patents than hardware manufacturers Lenovo (1,073) or Nintendo (1,043). The U.S. Navy, with 2,953 patents, has more than energy company Chevron, and specialty chemicals company Dow Corning combined (with 1,507 and 1,067 respectively).

This does not include the thousands of innovations that are either not patented or held by private companies or research institutions, and funded directly by the U.S. government. Nor does it include the key breakthroughs developed by private companies working to solve unique challenges that are surfaced by the government as a customer.

In a very real way, my company, Synthos Technologies—which is the technology division of Qbase, a federal IT services contractor—exists because our customers in the federal intelligence community had (and still have) needs that turned out to be relevant to commercial enterprises globally. The universal nature of those needs lowered our risk in making further investment to bring that technology to market.

Broadly speaking, the U.S. government’s policy of investing in and advancing cutting edge technologies lowers risk for investors who are often able to see new, commercial applications of innovative IP. This policy is good for job growth, global trade, and ultimately the economy.

This June, in my capacity as EVP and chief IP officer at Qbase, I was invited by the White House to speak to leaders tasked with developing innovation policies in the United States and China at the “6th Annual U.S.-China Innovation Dialogue” held at the U.S. State Department. The meeting was co-chaired by Wan Gang, who leads China’s Ministry of Science and Technology and Dr. John Holdren, The White House Office of Science and Technology Director (pictured together above, having a quiet moment before the sessions began). Both countries sent a number of senior officials from a variety of relevant agencies and ministries to this high-level program.

During past Innovation Dialogues like this one, the United States and China agreed to cooperate on technology research, standards, and market development for “smart infrastructure for urbanization.” The two countries are also cooperating to accelerate electric vehicle (EV) development through technical standards and interoperability. These kinds of big picture initiatives, again, lower risk for investors and allow markets to form with greater certainty.

The fact that the planet’s two largest economies are cooperating on issues like this is likely to create significant impact for initiatives in these arenas. Society and the businesses that bring these new technologies to bear will benefit tremendously.

Of course we can do far better with our innovation policy and with creating powerful new technologies. But we must understand and appreciate the very real impact of the U.S. government on innovation, and support investment to ensure that its activities have the greatest possible effect.

Erin-Michael Gill is the chief IP officer of Synthos Technologies, which was a Techonomy Policy partner.